Boston, MA 05/13/2014 (wallstreetpr) – All is not well at Aaron’s, Inc. (NYSE:AAN). The company is trying to fight off the influence of an investor that is determined to get rid of the company’s CEO Ron Allen.
Vintage Capital Management believes that Mr. Allen is not only a serial failure, but is coming up with strategies that at best alienate employees, customers and investors, which is detrimental for the company’s future. Vintage owns 10.1 percent stake in the company. The investment vehicle controlled by Brian Kahn also owns a controlling stake in Aaron’s competitor Buddy’s Home Furnishings.
Vintage has once upon a time tried to acquire Aaron’s, Inc. (NYSE:AAN) but failed in a bid when its offer was termed inadequate. The unsolicited offer of $30.50 per share or about $2.2 billion failed to entice the board of directors of Aaron’s. However, the making of the offer and the subsequent failure of the bid marked the beginning of public exchanges between Mr. Kahn and Mr. Allen.
Unpopular strategies
According to Mr. Kahn, Aaron’s, Inc. (NYSE:AAN) can only attain business success without Mr. Allen at the helm. In fact, he is accusing Mr. Allen alongside the Chairman of the Board Ray Robinson as having a track record of pursuing ill-advised strategies while failing shareholders in the process.
To eliminate the alleged underperformers, Vintage seeks to infiltrate the board of Aaron’s, Inc. (NYSE:AAN) with two nominees that it believes will bring open minds and new ideas to support bold actions towards the creation of shareholder value in the company. As such, Vintage is assembling its troupe among the shareholders to take on Mr. Allen and his team at the shareholder meeting on June 10.
Worrying performance
Though Aaron’s, Inc. (NYSE:AAN) is trying to fend off the insurgence of Vintage and its manager Mr. Kahn, the company’s performance in recent times has been worrying. The latest quarter showed performance decline from a year ago that seemingly confirms the claims by Mr. Kahn that paradigms shift is needed in the company if real success is to be achieved. The 1Q2014 results showed a 25 percent decline in net income and revenue also declined in the quarter.
